TD Ameritrade Earnings Preview: Spread-Based Revenues To Drive Results

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Brokerage firm TD Ameritrade (NASDAQ: AMTD) is scheduled to announce its Q2 fiscal 2016 earnings on Tuesday, April 19. Based on quarter to date figures, we expect continued growth momentum in the accumulation of spread-based assets and net interest revenue in the quarter. The company expects additional revenues of $50-$80 million in the full year from the revenue stream, owing to the Fed’s rate hikes. Although daily trades were up in January and February, a slow March will likely be a drag on the quarterly trade revenues. Additionally, a surprising deterioration has been seen in company’s fee-based balances in the first two months of the quarter, which could lower Ameritrade’s asset-based revenues, thus pressuring the company’s earnings.

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com

2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Ameritrade.

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